CEU Electronic Theses and Dissertations, 2018
| Author | Kolaciova, Katerina |
|---|---|
| Title | Emerging opportunities for financing the transition to a low carbon economy in private sector |
| Summary | Striving to keep below 2°C temperature increase by 2050 compared to the 1990 levels we are living through one of the most important periods of earth’s history. Decarbonisation has become one of the main priorities for governments and corporations all around the world, who are joining the efforts to contribute their share to the transition towards a low or carbon neutral economy. For corporations the transition to low carbon operations is a difficult and complex task that is bound to many challenges including economical viability and technological feasibility. According to the Fifth Assessment Report (AR5) of the Intergovernmental Panel on Climate Change (IPCC) Keeping below 2ºC requires peaking global GHG emissions before 2020 and that the emissions in 2050 are at least 49% to 72% below the level of emissions in 2010. According to the 2014 report of the Global Commission on the Economy and Climate, over 93 trillion USD in financing will be needed for the transition to low carbon economy over the next 15 years. The green finance market is undeniably on a rise, supported by a strong push by the policy makers and key finance market stakeholders. The options for financing the transformation for a low carbon economy are widening and companies should maximize their benefit from this development. As of 2018, the investments into low carbon transformations are not just fundamentally needed (to ensure the survival of planet), but also required by the policy (as a result of ambitious climate goals by 198 states signing the Paris Agreement) and economically sensible ( saving costs, contributing to portfolio and business risk management, increasing profitability, enabling to benefit from favourable conditions of green financing). The role of the money market is to enable access to financing for those companies, who acknowledge and choose to follow these trends. Depending on the aim, size of required financing, business cycle and optimal capital structure companies can choose from various types of financing. Green equity, green bonds and green loans are showing an impressive growth in the past few years. With the country level climate ambitions the state subsidies increase in significant amounts and world spread carbon market mechanisms contribute in financing by efficient climate finance allocation. Interest in financing the low carbon transformation is even spreading beyond the money market, to private participants via crowdfunding and crowd investment platforms. The access to green financing is still in a development stage. To maximize the impact of green finance, the companies first have to be aware of the available variants, choose wisely and make sure to comply with the eligibility criteria. In each case, green finance provides valuable financing opportunities and should be considered by companies who contribute to the transition to a low carbon economy. The aim of this project is to provide a simplified overview about the emerging opportunities on the green finance market for private sector. The project tackles 4 key questions: How does the global green finance market work? What are the main sources of green financing available and what are their main features? How to access the green financing? How to choose the most suitable financing from the available options? |
| Supervisor | Szilagyi, Peter |
| Department | Business School MSc |
| Full text | https://www.etd.ceu.edu/2018/csonka-kolaciova_kat.pdf |
Visit the CEU Library.
© 2007-2021, Central European University